Neutral Citation: 1994 ONICDRG 47

File No. A-002855

ONTARIO INSURANCE COMMISSION

BETWEEN:

MELINDA J. UPPER

Applicant

and

CANADIAN GENERAL INSURANCE COMPANY

Insurer

DECISION

Issues:

The Applicant, Melinda J. Upper, was injured in a motor vehicle accident on May 27, 1991. She applied for and received accident benefits from the Canadian General Insurance Company ("Canadian General") under Ontario Regulation 672¹. Weekly income benefits were paid until July 27, 1992, when they were terminated. Mrs. Upper claims that she continues to be eligible for weekly income benefits.

The parties participated in mediation, but the dispute was not resolved. Mrs. Upper then applied for arbitration. The issues in this hearing are:

1. Is Mrs. Upper entitled to weekly income benefits under section 12 of the Schedule for any period after July 27, 1992?

2. What is the proper amount of Mrs. Upper's weekly income benefits, calculated according to section 12 of the Schedule?

3. Has Mrs. Upper been overpaid by Canadian General and, if so, should she be required to repay any, or all, of the overpayment, according to section 27 of the Schedule?

Mrs. Upper also claims interest on any outstanding amounts owing, and her expenses incurred in the hearing.

Result:

1. Mrs. Upper is entitled to weekly income benefits for the period after July 27, 1992, plus interest according to section 24 of the Schedule. Her ongoing entitlement to weekly income benefits under section 12(5)(b) has not been determined.

2. Mrs. Upper is entitled to weekly income benefits at the minimum amount of $185.60 per week, with no reduction for post-accident income.

3. Mrs. Upper was overpaid "through error or fraud" and, therefore, she must repay the excess amount to Canadian General, according to section 27 of the Schedule.

4. Mrs. Upper is entitled to 50 per cent of her expenses related to the arbitration, calculated according to Ontario Regulation 664, Dispute Resolution Expenses.

Hearing:

The hearing was held in Niagara Falls, Ontario, on December 6, 7 and 8, 1993, January 31, 1994, and March 7, 1994, before me, David R. Draper, arbitrator.

Present at the Hearing:

Applicant: Melinda Upper

Applicant's Representative: Ashley Gnys Barrister and Solicitor

Insurer's Representative: Claude Blouin Barrister and Solicitor

Witnesses:

1. John Compisano, rehabilitation consultant

2. Melinda Upper, applicant

3. Dr. David S. Eden, family doctor

4. Dr. John Halpenny, orthopaedic surgeon

5. Margaret Heikkila, occupational therapist

6. Dr. David A. Henry, family doctor

7. Mary Camilla (Cammie) Bateman, applicant's sister

8. David J. Fast, Chartered Accountant

9. Daniel M. Edwards, Chartered Accountant

Exhibits: Fifty-six exhibits were submitted and are listed in Appendix A.

Reasons for Decision:

Mrs. Upper is 44 years old and has three children, aged eleven, fourteen and sixteen. She worked for many years as a bartender, generally full-time. In 1990, she was having family problems. Her husband had been diagnosed with multiple sclerosis, and was behaving erratically. Her sister, Ms. Cammie Bateman, suggested that she consider changing careers. Ms. Bateman was in the taxi business and felt that the flexible hours involved in driving a taxi would give her sister more time with her children and her husband. Mrs. Upper took this advice and in April 1990, started driving a taxi for Niagara Falls Taxi, a cooperative run by the owner/drivers. She owned her own taxi and hired a driver for the hours that she was not working.

On May 27, 1991, Mrs. Upper was involved in a motor vehicle accident. She was driving her personal car to the offices of Niagara Falls Taxi. She stopped to turn into the parking lot and her vehicle was struck from behind. She went into the office and asked someone to call the police. After speaking to the police, Mrs. Upper drove herself to the Niagara Falls General Hospital. X-rays were taken, she was fitted with a cervical collar, and was advised to see her family doctor for follow-up care.

Mrs. Upper saw Dr. Henry, her family doctor since 1984, on May 30, 1991, complaining of neck pain. He prescribed a muscle relaxant and analgesic medication.

On June 15, 1991, Mrs. Upper applied to Canadian General for accident benefits. Canadian General paid benefits, including weekly income benefits under section 12 of the Schedule. Mrs. Upper continued to receive weekly income benefits until July 27, 1992, when Canadian General stopped paying on the basis that she had been overpaid. Relying on a report prepared by Mr. Daniel Edwards, an accountant with Coopers and Lybrand, Canadian General decided that she had been receiving weekly income benefits at a rate in excess of her entitlement. For the purposes of this hearing, however, Canadian General took the position that by July 27, 1992, Mrs. Upper no longer met the disability test and, therefore, was no longer eligible for any weekly income benefits. Mrs. Upper claims that her entitlement is approximately $600 a week, and that she continues to be eligible for weekly income benefits.

1. Weekly Income Benefits - Eligibility

Mrs. Upper's eligibility for weekly income benefits is determined under section 12 of the Schedule, which provides:

12(1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident a weekly income benefit during the period in which the insured person suffers substantial inability to perform the essential tasks of his or her occupation or employment if the insured person meets the qualifications set out in subsection (2) or (3). [emphasis added]

At the time of her accident on May 27, 1991, Mrs. Upper was working as a taxi driver. The issue, therefore, is whether as a result of the injuries that she sustained in the accident, she is substantially unable to perform the essential tasks of driving a taxi.

Mrs. Upper's principal job task was driving her taxi. Most of her trips were within the city, but some fares involved driving longer distances. She also had to lift some parcels and bags, and assist elderly and disabled passengers in and out of her taxi. Because Mrs. Upper owned her own taxi, she had some control over her hours, but I find that her normal shift was approximately ten hours, and that a normal work week was five shifts.

Mrs. Upper claims that nearly three years after the accident, she is still unable to return to work as a full-time taxi driver. In my view, it is not surprising that Canadian General has questions about her continuing eligibility. The accident was not particularly serious, and Mrs. Upper's family doctor initially thought that she would be able to return to work within two weeks. In addition, the various medical professionals have presented somewhat different opinions about her condition, and there have been some problems with her rehabilitation. Based on the following findings, however, I conclude that Mrs. Upper has continued to be eligible for weekly income benefits under section 12 of the Schedule.

Prior to the accident, Mrs. Upper was in generally good health. The clinical notes of her family doctor, Dr. Henry, indicate that during 1990, she was anxious about her husband. Mr. Upper had been diagnosed with multiple sclerosis, and had become threatening and irrational. According to the clinical notes, Mrs. Upper did not see Dr. Henry from July 1990 until May 30, 1991, three days after the accident. Dr. Henry testified, however, that he was also Mr. Upper's family doctor, and he thought that Mrs. Upper came in with her husband for some of his visits.

I find that Dr. Henry initially did not regard Mrs. Upper's injuries as particularly serious. He completed a medical form on June 6, 1991, ten days after the accident, in which he stated that she had suffered a "cervical myofascial strain", and estimated that she would be able to return to her work on July 15, 1991 (Exhibit 7). He prescribed medication and recommended physiotherapy, which Mrs. Upper started in late June 1991.

Dr. Henry did a general examination on July 11, 1991 and found "slight improvement". On August 9, 1991, he noted that physiotherapy was completed, and that although Mrs. Upper still had intermittent pain, she was employable. I find, however, that Dr. Henry's approach was not particularly aggressive. He testified that he viewed her return to employment at this time as "discretionary". He told her to do what she could "without producing pain".

In September 1991, Mrs. Upper returned to work, although she testified that she only worked part-shifts. The evidence about when she worked was confusing. According to the records of Niagara Falls Taxi Ltd, she worked on September 29, October 1, 2, 3, 4, 9, 10, 11 and 15, 1991 (Exhibit 39). Mrs. Upper, however, provided trip sheets only for October 15, 16, 17 and 18, 1991 (Exhibit 20).

Mrs. Upper saw Dr. Henry on October 25, 1991, complaining that her neck was bothering her again. He prescribed medication and recommended that she repeat physiotherapy. Dr. Henry completed a medical form, dated October 31, 1991, stating that she had "re-aggravated myofascial strain", but that he felt she could return to work (Exhibit 7).

It appears from Dr. Henry's clinical notes that he became less actively involved in Mrs. Upper's treatment after October 31, 1991. She saw him on December 13, 1991, but no treatment is noted.

Canadian General arranged for Mrs. Upper to be assessed on December 19, 1991, by Dr. Halpenny, an orthopaedic surgeon. In his report, dated January 27, 1992, Dr. Halpenny indicated that at the time of his examination, Mrs. Upper was working two or three hours a day (Exhibit 6). This is consistent with the letter from Niagara Falls Taxi, which states that she worked on December 2, 5, 6, 12, 13 and 18 (Exhibit 39).

Dr. Halpenny concluded that Mrs. Upper had sustained soft tissue injuries, with damage to ligaments, tendons and muscles in the cervical and upper thoracic spine. He also found evidence of nerve root irritation causing headaches and pain into her shoulders. Dr. Halpenny recommended "an active physiotherapy program", and concluded:

Her ultimate prognosis is good. Her symptoms should continue to improve over the next few months, particularly with an active physiotherapy program. Hopefully she will be able to increase her time at work and will be able to work again full-time within two or three months time. At this stage I do not anticipate that she will have any long range problems.

On January 6, 1992, Dr. Henry simply noted that Mrs. Upper was receiving physiotherapy, as recommended by Dr. Halpenny. I did not receive much information about the physiotherapy program, but it is not clear that it was "an active physiotherapy program". In a subsequent report of the Canadian Back Institute, dated July 17, 1992, her physiotherapy program is described as "passive" (Exhibit 4).

Dr. Henry testified that he found Dr. Halpenny's initial report consistent with his own findings. He did not see Mr. Upper again for over five months. Mrs. Upper testified that she did not bother going to see Dr. Henry, because she did not feel that he was interested in her problems. He simply told her that her symptoms would go away, but she wanted treatment.

In March 1992, Mrs. Upper stopped working entirely, but continued her physiotherapy. Canadian General arranged for Mrs. Upper to see Dr. Halpenny for a follow-up assessment. In his report, dated May 15, 1992, he noted that she had completed approximately two and a half months of physiotherapy, and that "she was generally improved" (Exhibit 6). However, he concluded:

It is unlikely that this patient will be able to return to full time taxi cab driving in the future. I think that in 4 or 6 months time she may be able to work part time working up to 6 or 7 hours a day. I do not think she would be able to tolerate 10 or 12 hour shifts because of the stresses placed on the cervical spine with prolonged driving and the requirements of a taxi cab driver.

Therefore her ultimate prognosis is fair to good. I think she will have some improvement of her symptomatology over the next few months but I do not think she will have total resolution. She needs to maintain her active exercise program and to keep her neck as mobile as possible and also strengthen her shoulders and upper extremities. I think she will continue to have limitations in terms of lifting, prolonged sitting and driving in the future. This represents a partial permanent disability for this patient.

In his testimony at the hearing, Dr. Halpenny stated that Mrs. Upper impressed him as a sincere person who had made a sincere effort to return to work, but he was more pessimistic about her prognosis after the second visit. I find it difficult to understand the basis of Dr. Halpenny's rather dramatic change in prognosis. His opinion, however, affected Mrs. Upper's views about her situation. By this time, she was not satisfied with Dr. Henry's assurances that her injuries were limited to soft tissue injuries and that she would fully recover. Dr. Halpenny's report convinced her that her injuries were more serious, and had yet to be properly diagnosed.

Canadian General was concerned about Mrs. Upper's lack of progress and Dr. Halpenny's second report. In June 1992, it retained Associative Rehabilitation Inc. to coordinate her rehabilitation. In my view, this was a sensible step.

Mr. Compisano was the caseworker assigned by Associative Rehabilitation to work with Mrs. Upper. He met with her "as part of the initial evaluation process to obtain relevant information to assess the client's rehabilitation potential." At the time of their first meeting, Mrs. Upper was not working and complained of neck pain and intense headaches on a fairly regular basis.

Mr. Compisano met with Dr. Henry on June 23, 1992, and suggested that Mrs. Upper be referred to the Canadian Back Institute. Dr. Henry agreed with this approach, but did not feel that he could give a firm opinion without seeing her, since it had been over five months since her last visit.

Mrs. Upper saw Dr. Henry on June 29, 1992. Because of his concerns about Dr. Halpenny's pessimistic prognosis, Dr. Henry arranged for an assessment by Dr. Offierski, another orthopaedic surgeon. Unfortunately, Dr. Offierski was not able to see Mrs. Upper until October 30, 1992.

Although he was reluctant to challenge Dr. Halpenny's opinion, I find that Dr. Henry felt that Mrs. Upper should be able to return to work with proper treatment. This created some tension between him and Mrs. Upper, and she told Mr. Compisano that she would be looking for a new family doctor.

In the meantime, Mr. Compisano arranged for Mrs. Upper to be assessed at the Canadian Back Institute on July 16, 1992. According to Mr. Compisano's report, dated July 15, 1992, she was enthusiastic about going to the Canadian Back Institute. In the initial assessment report, Mrs. Upper was diagnosed as having chronic discogenic cervical spine pain, arising primarily within the intervertebral discs. The report also notes that she has suboccipital tension producing frontal headaches. The Canadian Back Institute concluded (Exhibit 4):

Mrs. Upper requires specific education regarding the nature of her symptoms. Armed with this knowledge, the patient will begin to apply the principles of symptom control that are essential to the rehabilitation process. Certainly, the passive rehabilitation that Mrs. Upper has received has been of no lasting benefit. This patient needs to begin an activity based program, focusing initially on symptom control and progressing toward recovery of function of the cervical spine. As the patients symptoms subside, she will require work conditioning. There is no question that being off of work for approximately 14 months has caused Mrs. Upper to become deconditioned, and this needs to be addressed prior to returning to work. A maximum of four weeks of work conditioning should increase this patient's sitting tolerance to the point where she can re-integrate into her job safely. Mrs. Upper requires case management to coordinate with the physician, insurance company, employer, and patient regarding returning the patient to work.

Canadian General agreed to fund Mrs. Upper's attendance in the six-week, Comprehensive Rehabilitation Program at the Canadian Back Institute. Mrs. Upper testified that she found the program painful and, from the start, she had disagreements with the principal therapist, Mr. Lanni. The reports indicate that in the initial weeks, the therapists at the Canadian Back Institute felt that she was making progress, and they were working toward her returning to modified work in September 1992.

Mrs. Upper did not complete the final week of the program at the Canadian Back Institute. She told them that she was going on vacation for a week, but I find that the real reason was that she felt that she was in too much pain to continue.

It is unfortunate that Mrs. Upper did not complete the program at the Canadian Back Institute. I am not prepared to conclude, however, that this reflects a general unwillingness to pursue rehabilitation. I find that she has been reasonably cooperative with respect to treatment and rehabilitation. A number of the health professionals have commented on her motivation to return to work. I find that she was genuinely concerned that the aggressive approach taken by the Canadian Back Institute might result in further injury. Ms. Heikkila, an occupational therapist who subsequently assessed Mrs. Upper; Dr. Eden, Mrs. Upper's current family doctor; and Mr. Compisano, all testified that in their experience, the Canadian Back Institute's approach does not work with everyone.

Mr. Compisano's reports indicate that Mrs. Upper was still looking for a more precise diagnosis. In his report, dated September 30, 1992, he noted that "she continues to be concerned that her problem is yet to be diagnosed and she feels that it maybe more than just a muscle injury." Mrs. Upper testified that she wanted to find out what her problem was and "cure it". She was looking forward to seeing Dr. Offierski in hopes that he would give her a better explanation for her continuing problems. Mr. Compisano felt that she should also be seen by an independent medical examiner, and arranged for Mrs. Upper to see Dr. Mascarenhas.

Mrs. Upper saw Dr. Offierski on October 30, 1992. She testified that she felt "ripped off' because after such a long wait, the examination was extremely brief. Dr. Offierski told her that there was nothing he could do unless she wanted an operation, although he was not really recommending surgery. In his report to Dr. Henry, dated October 30, 1992, Dr. Offierski stated that he "reassured her that structurally her neck was sound" and encouraged her to continue with her exercises (Exhibit 10). Mrs. Upper said that she thought that he would be able to recommend something, and was depressed about the lack of guidance.

Mrs. Upper then saw Dr. Mascarenhas. On November 30, 1992, he reported to Dr. Henry and to Canadian General. He described her injury as "a hyperextension/flexion injury of her cervical spine", and described her symptoms as "classical whiplash symptomatology" (Exhibit 8). Dr. Mascarenhas specifically disagreed with Dr. Halpenny's conclusion that Mrs. Upper was partially permanently disabled. He recommended that she attend a pain or headache clinic which would use "occipital blocks" to control her headaches. It was Dr. Mascarenhas' opinion that with appropriate pain management, she should be able to return to work.

Neither Dr. Offierski or Dr. Mascarenhas suggested that Mrs. Upper could return to full-time work immediately. Unlike Dr. Halpenny, however, they felt that returning to work as a full-time taxi driver was a realistic goal.

If Mrs. Upper had rejected the opinions of Dr. Offierski and Dr. Mascarenhas, I would have had serious concerns about her claim. However, she did not. She met with Mr. Compisano and discussed the reports. She was reluctant to start a twelve-week pain management course, but as an alternative, Mr. Compisano arranged for her to meet with Dr. Fargas-Babjak, an anaesthesiologist, for trigger point injections. Dr. Henry reviewed the reports and supported this approach.

In March 1993, Mrs. Upper changed family doctors. She met with Dr. Eden on March 2, 1993, and they agreed that he would continue as her family doctor. I was impressed with the evidence of Dr. Eden and find that as a result of his involvement, Mrs. Upper's treatment was coordinated in a way that it had not been previously. Dr. Eden explained that he took a functional approach in which functional improvement, not pain reduction, is the primary goal. His approach is summarized in his report, dated July 22, 1993:

Ms. Upper and I then discussed setting treatment goals, which were as follows:

1. Return to work, hopefully (but not necessarily) in her previous job description.

2. Normalisation of function and activities of daily living; and, reduction of pain to the point where it would not interfere with a normal and productive life. At this point in time, complete elimination of pain would be possible but not probable. Function should be the focus of therapy.

We also identified the following components of her job description which would be most likely to adversely interact with her injury:

1. Prolonged sitting, and

2. Heavy lifts e.g. suitcases.

Based on the above, we agreed on the following plan:

1. Vocational assessment, with a view to deciding one of

a) Return to previous occupation, no restrictions

b) Return to previous occupation, specified restrictions, or

c) Unable to return to previous occupation; specify suitable retraining programme for different occupation.

2. Long term pain management.

After Mrs. Upper's treatment was underway, Dr. Eden met with Mr. Compisano on March 22, 1993, and agreed that a vocational assessment should be done. Mr. Compisano arranged for a five-day functional abilities assessment at Niagara Rehabilitation from May 3 - 7, 1993. Mrs. Heikkila, an occupational therapist, evaluated her ability to perform various types of work, including driving a taxi. Mrs. Heikkila was convinced that Mrs. Upper was genuinely interested in returning to work. In her report, dated May 13, 1993, she concluded that Mrs. Upper was unable to return to work (Exhibit 9):

At this time, Ms. Upper would be unable to return to the full physical demands of the taxi cab driver job. Most significantly, her sitting tolerance is well below the requirement of the job and this would most significantly limit her from the job. In addition, the lifting, especially for heavier items would be too physically demanding.

Ms. Heikkila recommended that Mrs. Upper get involved in a strengthening and conditioning program in conjunction with a work hardening program, with a gradual reintegration into driving her taxi.

As part of the treatment plan, Dr. Eden referred Mrs. Upper to Ms. Linda Shedden, a physiotherapist, for physiotherapy and acupuncture. Ms. Shedden found evidence of temporomandibular joint dysfunction which she thought might be contributing to Mrs. Upper's headaches. With the approval of Mr. Compisano, a referral was made to Dr. Taliano, an oral and maxillofacial surgeon.

Dr. Taliano diagnosed Mrs. Upper as having myofacial pain dysfunction or temporomandibular joint dysfunction, and stated his opinion that the accident aggravated a pre-existing problem. He recommended that she be fitted with new dentures and start relaxation exercises.

I have some question about the relationship between the accident and Mrs. Upper's jaw problems, notwithstanding Dr. Taliano's opinion. This is based largely on the fact that she had a pre-existing problem and did not complain of any jaw problems for almost two years after the accident. Whether or not her jaw condition was caused by the accident, however, I find that it interrupted Dr. Eden's treatment plan, particularly her therapy with Ms. Shedden.

Mrs. Upper was able to proceed with the trigger point injections, which were done by Dr. Fargas-Babjak on June 5, 1993. Mrs. Upper reported that although the injections were painful, they helped reduce her pain for about three days, but then the headaches returned.

Mr. Compisano and Dr. Eden discussed Mrs. Upper's need for physical conditioning, but the goal remained for her to return to work as a full-time taxi driver. On July 19, 1993, Dr. Eden met with Mrs. Upper and concluded (Exhibit 5):

Based on Ms. Upper's history and progress, it is my opinion that she will continue to experience pain, related to the motor vehicle accident of 27th May, 1991, for a considerable length of time, and quite possibly for the rest of her life. She has had a good functional recovery, especially in terms of her neck range-of-motion, but has experienced muscle deconditioning, due to the motor vehicle accident and subsequent recovery, which will prevent her from regaining, in the foreseeable future, the ability to lift heavy objects without risk of serious pain and spasm.

With respect to her ability to resume her previous occupation of taxi driver, Ms. Upper is fit with the following 2 restrictions:

1. Must be able to get out of vehicle for brief walk and range-of-motion exercise as often as every half-hour.

2. Maximum carry is 10 lb.

Dr. Eden and Mrs. Upper agreed that she would return to work part-time, keeping in mind her restrictions, with a simultaneous reconditioning program. On July 22, 1993, she drove her taxi for approximately three hours. She reported that she was able to do this, but experienced severe pain later in the evening.

Mrs. Upper had a second visit with Dr. Fargas-Babjak on September 17, 1993. Dr. Fargas-Babjak found that she still had tender points, and gave her an injection. She recommended that Mrs. Upper be treated with massage. I find that during the fall of 1993, Mrs. Upper continued with physiotherapy with Ms. Shedden and started massage with Ms. Boyce, but active therapy, particularly work hardening, was delayed while she was waiting to be fitted with her dentures.

Mrs. Upper's recovery certainly has been slow. I am not convinced, however, that her complaints and restrictions are anything but genuine. Prior to the accident, she had demonstrated a willingness to work. She worked full-time while her children were young, and switched occupations to accommodate her family responsibilities. Although I have concerns about the accuracy of her financial records, discussed below, I found her testimony about her disability believable.

I also rely on the fact that none of the health professionals found Mrs. Upper's complaints implausible. In particular, Dr. Eden gave convincing testimony that since he has been involved, she has cooperated with the various treatments that have been proposed. Mr. Compisano was also generally supportive of her efforts. Even Dr. Henry, with whom Mrs. Upper had disagreements about her diagnosis and treatment, did not suggest that she was malingering. In fact, he described her as a reliable patient, and praised her perseverance in dealing with her husband's disability.

I conclude, therefore, that Mrs. Upper has remained eligible for weekly income benefits under section 12 of the Schedule. I note that according to section 12(5)(b) of the Schedule, the eligibility test changes after three years. The issue of Mrs. Upper's eligibility for weekly income benefits beyond three years was not addressed in this arbitration.

2. Weekly Income Benefits - Quantum

The amount of Mrs. Upper's weekly income benefits is determined under section 12. According to section 12(4), her weekly income benefits are to be the lesser of $600 a week and 80 per cent of her gross weekly income. "Gross weekly income" is defined in section 12(7), as follows:

12.--(7) The following rules apply to the calculation of gross weekly income:

1. A person's gross weekly income shall be deemed to be the greatest of,

i. his or her average gross weekly income from his or her occupation or employment for the four weeks preceding the accident,

ii. his or her average gross weekly income from his or her occupation or employment for the fifty-two weeks preceding the accident,

iii. $232.

2. ...

3. Business expenses which cease as a result of the accident shall be deducted from a person's income from self-employment before calculating his or her gross weekly income.

The insurer is entitled to deduct 80% of the applicant's post-accident income from the weekly income benefits:

15. The insurer may deduct from any benefit payable under this Part 80 per cent of any income received or available from any occupation or employment subsequent to the accident.

Mrs. Upper's claim is based on the four weeks preceding her accident on May 27, 1991. This is the period from April 29, 1991 to May 26, 1991, inclusive. She presented a number of alternative calculations, but her claim is for approximately $600 a week, with no deductions for post-accident income.

Canadian General takes the position that Mrs. Upper's evidence about her income, both pre-accident and post-accident, is not credible and, therefore, her entitlement should be limited to the minimum amount of $185.60 per week. Mr. Edwards, the accountant retained by Canadian General, concluded that Mrs. Upper's financial records were not "genuine business records". Mrs. Upper conceded that the records were not perfect, but maintained that they reasonably reflect her income.

Mrs. Upper claims that her gross revenues, including her share of the drivers' fares, from April 29, 1991 to May 26, 1991, were $4,953.83. She acknowledges that this is significantly higher than she earned during any other period.

According to her 1990 income tax return, Mrs. Upper's gross revenues were $16,708.99 for the period from April 26, 1990 to December 31, 1990, or approximately $2,100 a month. She claimed expenses of $16,520.23, leaving a net income for 1990 of $188.76. On a monthly basis, her records show her gross revenues as follows (Exhibits 18 and 22):

Year	Month	Amount
1990	May	$2,296.34
	June	$2,334.04
	July	$1,974.25
	August	$1,992.30
	September	$1,873.73
	October	$2,077.60
	November	$1,790.18
	December	$1,956.25
1991	January	$2,323.43
	February	$1,953.22
	March	$1,886.94
	April	$3,525.35
	May	$4,833.03

The increase in revenue in April and May 1991 is striking, but according to section 12(7), Mrs. Upper is entitled to choose either the four or fifty-two weeks preceding the accident, whether or not it most accurately reflects her usual income level, or her anticipated future income. The issue is whether her records are accurate, particularly the handwritten monthly ledger sheets (Exhibits 18 and 53) and the trip sheets (Exhibit 19).

Mrs. Upper advanced a number of explanations as to why her income was so much higher during the four weeks preceding the accident. Initially, she explained that her income increased because her family problems had resolved. She stated that by the end of April 1991, she no longer felt responsible for her husband or his actions, and had decided to make a career of driving a taxi. Mrs. Upper subsequently testified, however, that when she applied for accident benefits on June 15, 1991, she under-reported her income because her husband was seeking custody of the children, and she was hiding income from him.

Another explanation was that she had run into an old friend working at the Foxhead, a large hotel, who started referring longer trips to her. In his submissions, Mrs. Upper's representative described this as the main reason for her increased income. Even if her trip sheets are accurate, however, they show only seven trips from the Foxhead in the four weeks preceding the accident, with fares totalling $231.60 (Exhibit 19).

Finally, Mrs. Upper testified that in May, the tourist business increases and expenses are lower because the weather is moderate. This seems to be a reasonable explanation for some increase in profits, but the profits for May in other years and the revenue from the other drivers in May 1991 do not show the kind of dramatic increase that Mrs. Upper is claiming.

The most significant problem with Mrs. Upper's claim, however, is that her records do not withstand close scrutiny. For the following reasons, I do not accept the accuracy of the documents that she submitted to support her claim, particularly the handwritten ledger sheets (Exhibits 18 and 53) and the trip sheets (Exhibit 19).

Mrs. Upper started her taxi business in April 1990. She had no experience in the taxi business, or as an employer, and, therefore, she relied heavily on the advice of her sister, Ms. Bateman. Ms. Bateman helped her set up her books and referred her to Mr. David Fast, an accountant familiar with the local taxi industry.

As an owner/driver with Niagara Falls Taxi, Mrs. Upper paid weekly dues for which she received various services, including dispatch. Each owner/driver operates independently and, therefore, the company has no record of Mrs. Upper's income, although it does have records of the days on which she checked in for work.

Mrs. Upper testified that she completed a daily trip sheet and kept receipts for her expenses. The drivers that she hired were expected to do the same, and received 40% of their fares, plus all of their tips. Some regular customers, such as schools and law firms, were able to charge fares, rather than pay cash. Although Mrs. Upper had to wait for payment of these charges through Niagara Falls Taxi, her drivers were paid as if they were cash fares.

According to Mrs. Upper, she kept the trip sheets and receipts in a box, and every two or three months, her sister helped her complete the monthly records. Ms. Bateman testified that they did the monthly records every three to four months. I heard evidence from Mr. Fast, Mrs. Upper's accountant, about the bookkeeping practices of local taxi owners. I have no difficulty accepting that the standards are not particularly high, and that this type of shoebox recordkeeping is typical.

Although the onus is on Mrs. Upper to establish her claim, this does not mean that she needs perfect records in order to succeed. It would be unreasonable to require a relatively inexperienced owner of one taxi to maintain the same type of records that would be expected from a sophisticated corporation.

Mrs. Upper's monthly records for 1990 are computerized (Exhibit 22). She testified that she switched to handwritten ledger sheets in 1991 because her computer broke down in January 1991. It is not clear when the monthly computer printouts for 1990 were prepared, but they were used in June 1991 to prepare her 1990 income tax return (Exhibit 12).

Mrs. Upper applied for accident benefits on June 15, 1991, at approximately the same time that Mr. Fast prepared her 1990 income tax return. In support of her application, she provided a computer printout of her income for May 1991, in exactly the same form as the ones produced for 1990. Canadian General paid weekly income benefits based on this information, although I was not given details about the calculation or the amounts paid.

The financial information that Mrs. Upper provided to Canadian General with her application differs significantly from the ledger sheets and trip sheets upon which she now relies. I have set out the following comparison of the gross revenue shown on the computer printout for May 1991 (Exhibit 56) and on the handwritten ledger for May 1991 (Exhibit 18) because, in my view, the numbers are striking:

DATE	MRS. UPPER PRINTOUT	MRS. UPPER LEDGER	DRIVER PRINTOUT	DRIVER LEDGER
May 1	$57.20	$147.25	0	0
2	$64.30	$158.35	0	0
3	$68.40	$205.45	0	0
4	0	0	$45.18	0
5	0	0	0	$45.18
6	$63.60	$154.75	0	0
7	$58.30	$188.55	0	0
8	0	$174.95	$36.50	$36.50
9	$76.55	$171.55	0	0
10	$74.60	$178.55	0	0
11	0	0	$63.25 $88.15	$53.25 $78.30
12	0	$180.00	$44.60	$34.60
13	$38.05	$76.05	$48.05	$48.05
14	$39.95	$147.50	0	0
15	$64.70	$176.35	$102.85	$102.85
16	0	$159.80	$56.25	$56.25
17	0	$183.30	$106.65	$106.65
18	0	$69.10	$52.15	0
19	0	$247.35	$109.15	$39.15 $109.15
20	0	0	$31.40	$31.40
21	0	0	$50.55	$50.55
22	$43.00	$159.60	0	0
23	0	$132.05 $176.35	$60.75 $72.15	$60.75 $72.15
24	$53.20	$164.80	$81.50	0
25	$48.30	0	$49.44 $63.90	$81.50
26	0	$194.75	$63.20	$49.50 $63.90
27	$58.40	0	$66.35	$43.20
28	0	0	$39.00	$66.35
29	0	0	24.75	0
30	0	0	$41.80	$81.05 $41.80
31	0	0	$57.45 $75.00	$34.50
TOTALS	$808.55	$3,446.40	$1,530.02	$1,386.58

The drivers' fares on the computer printout are relatively consistent with the ledger sheets. In contrast, Mrs. Upper's fares are totally different in the two documents; none of the daily income amounts match and the total amount for the month is over four times higher on the ledger sheet. Mrs. Upper initially testified that she could not remember preparing the computer printout for May 1991, or using her computer after January 1991. She then testified that she initially under-reported her income to Canadian General, because her husband was pursuing custody of their children and she did not want him to know how much money she was making. Mrs. Upper stated that when she realized that she would not be able to return to work as quickly as she had expected, she filed some new forms with Canadian General. Still later, probably in or about July 1992, she finally provided Canadian General with her 1990 income tax return and her trip sheets for the four weeks preceding the accident. Apparently, she did not provide any of the handwritten ledger sheets, or her 1991 tax return, although it is dated June 17, 1992.

I am concerned that Mrs. Upper acknowledged filing false information. Her explanation for under-reporting her income to Canadian General, however, is difficult to understand. It is not clear how it would help her position in a custody dispute to minimize her income. Also, if her intention was to hide income from her husband in May and June of 1991, why would she file an accurate 1990 income tax return and keep accurate trip sheets, but prepare a false monthly summary in support of her claim for accident benefits?

Mr. Edwards meticulously reviewed Mrs. Upper's financial information and came to the conclusion that her 1991 monthly ledger sheets and her trip sheets for the four weeks preceding the accident are not "genuine business records." I found his analysis convincing and substantially accept it.

Mrs. Upper's accountant, Mr. Fast, accepted the figures that she provided and dealt with any inconsistencies as sloppy bookkeeping. His calculations, therefore, depend on the general accuracy of her records. Some of the problems with Mrs. Upper's records are simply entry errors and arithmetic mistakes. After reviewing all of the evidence, however, I am convinced that the problems with Mrs. Upper's records cannot be explained as bookkeeping mistakes.

Mrs. Upper's financial records raise many questions. I will deal with some of the more striking problems.

In my view, it is significant that although Mrs. Upper claims a large increase in fares in May 1991, she has no corresponding increase in gasoline expenses. According to the handwritten ledger sheet for March 1991, Mrs. Upper and her drivers had fares totalling $1,886.94, with gasoline expenses of $630.00. In May 1991, the gasoline expenses are approximately the same, $612.50, but the fares total $4,833.03, over two and a half times higher. In June 1991, gasoline expenses decreased slightly to $581.00, but total fares were only $1,850.95, approximately the same as in March 1991.

It also appears that the trip sheets that Mrs. Upper provided for the four weeks preceding the accident were prepared sometime after her initial application for accident benefits. The first four entries on the trip sheet for May 1, 1991 total $57.20, the amount set out in the computer print-out. The amount on the ledger sheet is $147.25. For May 3, 1991, two of the entries of the trip sheet total $68.40, the amount on the computer printout. In addition, I place some weight on Mr. Edwards' observation that earlier trip sheets had been folded, but the ones for the four weeks preceding the accident are clean and unfolded.

I am also troubled by the apparent alteration of the handwritten ledger for April 1991 (Exhibit 53). According to the handwritten ledger for April 1991, Mrs. Upper's total fares (Driver #1) were $2,233.25. This is the amount that Mr. Fast used in June 1992 to prepare her 1991 income tax return. The daily fares set out on the April ledger now total $2,391.70, not $2,233.25. In his letter to Mr. Gnys, dated June 14, 1993, Mr. Fast states that Mrs. Upper's fares for April 29, 1991 to May 5, 1991 were $868.53 (Exhibit 36). This figure does not correspond to the ledger sheet or the trip sheets.

It appears, therefore, that sometime after June 14, 1993, the entries on the ledger for April 29 and 30, 1991, were increased by a total of $158.45. The increase is not particularly significant, but what is of concern is Mrs. Upper's failure to acknowledge the alteration and explain why it was done.

It is difficult to unravel Mrs. Upper's actual financial situation. I conclude, however, that the records which she provided to prove her income in the four weeks preceding the accident are not genuine. In my view, this casts serious doubt on all of her records.

Post-accident income can reduce weekly income benefits below the minimum rate of $185.60 per week. It was submitted on behalf of Canadian General, however, that Mrs. Upper's entitlement should be $185.60, with no reduction for post-accident income. This approach has been accepted in previous arbitration decisions in which neither pre-accident or post-accident income could be accurately determined (e.g. Claude Morin and Lumbermans Mutual Casualty Company, June 16, 1993, OIC File No. A-001311). I conclude that Mrs. Upper's entitlement should be limited to $185.60 per week, but with no reduction for post-accident income.

3. Overpayment

I was not provided with a complete payment history, but my understanding is that Mrs. Upper has been paid weekly income benefits of approximately $312 per week. Therefore, she has been overpaid. The recovery of overpayments is addressed in section 27 of the Schedule:

27.--(1) A person must repay to the insurer any benefit received under this Schedule that is paid to the person through error or fraud.

Canadian General based its calculation of Mrs. Upper's weekly income benefits on the information that she provided. It is reasonable for an applicant to rely on the insurance company to calculate his or her benefits properly, but insurers must often base their calculations on information provided by the applicant. As stated in Claude Morin and Lumbermans Mutual Casualty Company, June 16, 1993, OIC File No. A-001311, section 27(1) should be interpreted in a manner that will encourage the early payment of claims. I do not believe that an insurer's decision to pay benefits pending the receipt of further evidence, or pending mediation and arbitration, should preclude its right to recover an overpayment under section 27.

I conclude, therefore, that the overpayments received by Mrs. Upper were paid "through error or fraud" and, according to section 27, must be repaid.

4. Expenses

Mrs. Upper claims the expenses that she has incurred in this arbitration. An award for expenses may be made under section 282(11) of the Insurance Act, R.S.O. 1990, c.I.8, which provides as follows:

282 (11) The arbitrator may award to the insured person such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations to the maximum set out in the regulations.

The prescribed expenses and amounts are set out in Schedule 1 of the Dispute Resolution Practice Code and in Ontario Regulation 664, R.R.O. 1990.

Arbitrators have consistently granted expenses unless the claim was fraudulent, manifestly frivolous or vexatious, or the applicant's conduct unduly prolonged the proceedings. Mrs. Upper was successful on the issue of her eligibility for weekly income benefits and, therefore, should recover some of her expenses. However, in light of my finding that her records are not genuine business records, I do not feel that I can grant her expenses with respect to the issue of quantum.

Nothing in this decision is meant as a criticism of either Mr. Gnys or Mr. Fast. They both acted very professionally and served their client well. I am sympathetic to Mr. Gnys' submission that the absence of a discovery process means that some aspects of the case may not be clarified until well into the hearing. In this case, the importance of Mrs. Upper's original application was not obvious until the fourth day of the hearing.

Mrs. Upper's expenses cannot neatly be divided between the two issues. I conclude, therefore, that she is entitled to half of her expenses related to the arbitration. If the parties are unable to agree on the amount of the expenses, I remain seized of this matter and either party may apply for an assessment of the expenses.

Mr. Blouin submitted that if Mrs. Upper is awarded expenses, Canadian General should be able to set off the amount of the expenses against any overpayment that she is required to repay. He argued that it would be unfair to require Canadian General to make further payments to Mrs. Upper when she has been ordered to reimburse Canadian General for the overpayment, particularly given the fact that Canadian General continued to pay weekly income benefits of approximately $312 per week, pending the outcome of the arbitration.

Mr. Gnys submitted that to allow Canadian General to set off the expenses would undermine the dispute resolution process because she is unable to pay the experts who appeared on her behalf. Mrs. Upper faces substantial expenses. This was a five day hearing which involved significant preparation and a number of expert witnesses. Access to legal representation is an important concern. Although arbitration hearings are meant to be relatively informal, many hearings involve extensive oral and documentary evidence, and interpretation of the legislation. In this case, Mrs. Upper was faced with the expert opinion of Mr. Edwards, an experienced accountant. I found the involvement of Mr. Gnys and the expert witnesses helpful.

However, according to section 282(11) of the Insurance Act, expenses are awarded to the applicant, not to the lawyer. Despite my serious concerns about the implications of allowing a set-off, I find nothing in the legislation to prevent Canadian General from setting off Mrs. Upper's expenses against her overpayment.

Order

1. Mrs. Upper is entitled to weekly income benefits for the period after July 27, 1992, plus interest according to section 24 of the Schedule. Her ongoing entitlement to weekly income benefits under section 12(5)(b) has not been determined.

2. Mrs. Upper is only entitled to weekly income benefits at the minimum amount of $185.60 per week, with no reduction for post-accident income.

3. Mrs. Upper was overpaid "through error or fraud" and, therefore, she must repay the excess amount to Canadian General, according to section 27 of the Schedule.

4. Mrs. Upper is entitled to 50 per cent of her expenses related to the arbitration, calculated according to Ontario Regulation 664, Dispute Resolution Expenses.

June 3, 1994

David R. Draper Arbitrator

Date

APPENDIX A

Exhibit 1 Photocopy of a Motor Vehicle Accident Report, dated May 27, 1991.

Exhibit 2 Photocopies of reports and correspondence prepared by Associative Rehabilitation Inc.:

1. June 19, 1992 Initial Evaluation Report
2. June 24, 1992 Letter to Dr. David Henry
3. June 29, 1992 Follow-up Report
4. July 15, 1992 Follow-up Report
5. July 31, 1992 Follow-up Report
6. Sept. 14, 1992 Follow-up Report
7. Sept. 30, 1992 Follow-up Report
8. Oct. 30, 1992 Follow-up Report
9. Dec. 16, 1992 Follow-up Report
10. March 1, 1993 Letter to Dr. David Henry
11. March 1, 1993 Follow-up Report
12. March 31, 1993 Follow-up Report
13. March 31, 1993 Letter to Dr. David Eden
14. May 14, 1993 Follow-up Report
15. June 15, 1993 Follow-up Report
16. July 19, 1993 Letter to Dr. David Eden
17. July 19, 1993 Follow-up Report
18. Aug. 25, 1993 Follow-up Report
19. Sept. 27, 1993 Follow-up Report
20. Oct. 27, 1993 Follow-up Report

Exhibit 3 Photocopies of reports of Dr. A. Fargas-Babjak:

1. Report of Dr. A. Fargas-Babjak to Mr. Ashley Gnys, dated November 29, 1993.
2. Report of Dr. A. Fargas-Babjak to Sharpe, Beresh & Gnys, Barristers and Solicitors, dated August 20, 1993, including three pages of clinical progress notes.

Exhibit 4 Photocopies of reports of the Canadian Back Institute:

1. Rehabilitation Assessment Report, dated July 16, 1992
2. Discharge Report, dated September 14, 1992.
3. Weekly Progress Report, dated July 29, 1992.
4. Weekly Progress Report, dated August 5, 1992.
5. Weekly Progress Report, dated August 21, 1992.

Exhibit 5 Photocopies of documents from Dr. David S. Eden:

1. Report to Mr. Compisano, Associative Rehabilitation Inc., dated April 15, 1993.
2. Curriculum vitae.
3. Statement of Qualifications.
4. Clinical notes and records (8 pages).
5. Report to Mr. Ashley R. Gnys, dated July 22, 1993.

Exhibit 6 Photocopies of reports of Dr. John Halpenny:

1. Report to Morris Medical Assessments, dated January 27, 1992.
2. Report to Morris Medical Assessments, dated May 15, 1992.

Exhibit 7 Photocopies of documents from Dr. David A. Henry:

1. Report to Mr. Ashley Gnys, dated July 22, 1993.
2. Clinical notes and records (11 pages).

Exhibit 8 Photocopies of reports of Dr. Lyndon F. Mascarenhas:

1. Report to Dr. D. Henry, dated November 30, 1992.
2. Report to Canadian General Insurance, dated November 30, 1992.

Exhibit 9 A photocopy of a Functional Abilities Evaluation Report from Niagara Rehab, dated May 13, 1993.

Exhibit 10 A photocopy of a report of Dr. Christopher M. Offierski, dated October 30, 1992.

Exhibit 11 Photocopies of reports of Dr. A. D. Taliano:

1. Report to Mr. Ashley Gnys, dated July 28, 1993.
2. Report to Dr. Eden, dated June 16, 1993.
3. Report to Mr. John Compisano, Associative Rehabilitation Inc., dated June 16, 1993.
4. Clinical notes and records (4 pages).

Exhibit 12 A photocopy of an Individual Income Tax Return for Mrs. Upper for 1990.

Exhibit 13 A photocopy of an Individual Income Tax Return for Mrs. Upper for 1991.

Exhibit 14 A Statement of Income and Expenses for Melinda Upper, Car #29, Niagara Falls Taxi, for the period January 1, 1991 to May 26, 1991, prepared based on figures prepared by David Fast, chartered accountant.

Exhibit 15 A photocopy of a Statement of Income and Expenses (unaudited), prepared by David J. Fast, chartered accountant, for Mrs. Upper for the period May 27, 1991 to December 31, 1991.

Exhibit 16 A photocopy of an Individual Income Tax Return for Mrs. Upper for 1992.

Exhibit 17 A photocopy of a Statement of Income and Expenses (unaudited), prepared by David J. Fast, chartered accountant, for Mrs. Upper for the five month period ending May 31, 1993.

Exhibit 18 A photocopy of the records of Mrs. Upper's business for 1991.

Exhibit 19 Twenty-three trip sheets, plus receipts for the period April 29, 1991 to May 27, 1991.

Exhibit 20 Thirteen trip sheets, plus receipts for the period October 15, 1991 to March 13, 1992.

Exhibit 21 Four photographs of Mrs. Upper's automobile.

Exhibit 22 A photocopy of the records of Mrs. Upper's business for 1990.

Exhibit 23 A photocopy of the records of Mrs. Upper's business for 1992.

Exhibit 24 A photocopy of the records of Mrs. Upper's business for January to May 1993.

Exhibit 25 "Statement of Profit and Loss" - April 29, 1991 to May 26, 1991 - Theory "A".

Exhibit 26 "Statement of Profit and Loss for Mrs. Upper's business" - April 29, 1991 to May 26, 1991 - Theory "B".

Exhibit 27 "Comparison of averages" - April 27, 1990 to May 31, 1993.

Exhibit 28 Copies of records from Niagara Falls Taxi for 1991.

Exhibit 29 Copies of records from Niagara Falls Taxi for 1992

Exhibit 30 A photocopy of calculations prepared by Mr. Fast based on Exhibits 28 and 29.

Exhibit 31 Revenue analysis of Mrs. Upper's business for 1991, prepared by David J. Fast.

Exhibit 32 Revenue analysis of Mrs. Upper's business for 1992, prepared by David J. Fast.

Exhibit 33 A photocopy of a report of Daniel M. Edwards, Coopers & Lybrand, dated July 31, 1992.

Exhibit 34 A photocopy of a letter, dated January 21, 1993, from David J. Fast, Chartered Accountant, to Canadian General Insurance.

Exhibit 35 A photocopy of a report of Daniel M. Edwards, Coopers & Lybrand, dated May 7, 1993.

Exhibit 36 A photocopy of a letter, dated June 14, 1993, from David J. Fast, Chartered Accountant, to Ashley Gnys, Barrister and Solicitor.

Exhibit 37 A photocopy of a report of Daniel M. Edwards, Coopers & Lybrand, dated July 23, 1993.

Exhibit 38 Photocopies of records from the Royal Bank relating to Melinda Upper (21 pages).

Exhibit 39 A letter, dated May 11, 1992, from Niagara Falls Taxi Ltd. to Canadian General Insurance.

Exhibit 40 The resume of Dr. Lyndon Francis Mascarenhas.

Exhibit 41 A contact with Norm's Dain City Auto Sales Ltd., dated May 16, 1991.

Exhibit 42 A trip sheet, dated April 31.

Exhibit 43 A trip sheet, dated May 15, 1990.

Exhibit 44 A trip sheet, dated June 5, 1990.

Exhibit 45 A trip sheet, dated July 13, 1990.

Exhibit 46 A gas receipt from Nick's Atlantic Service, dated May 16, 1990.

Exhibit 47 A trip sheet, dated May 19, 1991, with two gas receipts attached.

Exhibit 48 A trip sheet, dated January 25, 1991, with a gas receipt attached.

Exhibit 49 A trip sheet, dated May 26, 1991, with two gas receipts attached.

Exhibit 50 A trip sheet, dated May 11, 1991.

Exhibit 51 A trip sheet, dated May 11.

Exhibit 52 A trip sheet, dated "M-12-91".

Exhibit 53 The original journal sheet for March 1991 and April 1991.

Exhibit 54 Eighteen trip sheets, with attached gas receipts, for April 1991.

Exhibit 55 General Purpose Receipt, dated May 17, 1991.

Exhibit 56 Photocopy of Melinda Upper's Application for Accident Benefits, dated June 15, 1991, with computer print out attached.

In addition to the exhibits, the following documents were before the Arbitrator:

• Report of Mediator, dated December 4, 1992.

• Application for Appointment of an Arbitrator, dated February 3, 1993.

• Response by Insurer, dated March 4, 1993.

• Reply by Insured Person, received by the Ontario Insurance Commission on March 17, 1993.

• Letter, dated May 18, 1993, confirming a pre-hearing discussion held on May 17, 1993.

• Letter, dated June 29, 1993, confirming pre-hearing discussions held on June 16 and 26, 1993.

Footnotes

1. 1Prior to January 1, 1994, Ontario Regulation 672 was called the No-Fault Benefits Schedule. After that date it became the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994. In this decision, the term "Schedule" will be used to refer to Regulation 672.